ENS Economic Bureau
| New Delhi |
Published: December 18, 2019 3:33:30 am
Union Finance Minister Nirmala Sitharaman. (File)
In a pre-Budget consultation with Finance Minister Nirmala Sitharaman Tuesday, stakeholder groups from industry, trade and services sectors recommended measures for promoting exports, lowering of taxes on equity capital and expansionary fiscal policy for boosting growth.
The representatives submitted suggestions concerning reduction of compliance burden and tax litigation, allowing self-certification in low risk industry, decriminalisation of tax and company laws. Besides, they demanded reduction of cost of equity capital, simplification and rationalisation of duties and labour laws, adoption of international standards of alternative dispute resolution, export development funds for helping MSME exporters and ease of investment flow into manufacturing sector.
Industry chamber CII suggested to the government for adoption of an expansionary fiscal policy, with a range of around 0.5 per cent to 0.75 per cent deviation from the target of fiscal deficit of achieving 3.3 per cent of GDP. The additional leeway could be spent on asset creation, especially in rural infrastructure. Industry leaders also suggested the government to remove long term capital gains tax on shares.
“The main areas of discussion during the aforesaid meeting included regulatory environment impacting private investment, measures for promotion of exports amidst rising protectionist tendencies, industrial production, logistics, media & entertainment services & IT & IT enabled services among others,” the Finance Ministry said in a statement said.
Speaking to reporters after the meeting, CII President Vikram Kirloskar said: “They (ministers and government officials) have understood the situation, the headwinds in the economy and they have looked at all the possible suggestions whether it is to have fiscal easing which is what we have suggested, various ways to improve tax collection, improve demand”. To promote international trade, CII suggested the government should sign India-EU Bilateral Trade and Investment Agreement, which will enable resumption of talks on Free Trade Agreement with the European Union.
India’s GDP growth rate at 4.5 per cent for Q2, 2019-20, has hit a 26-quarter low in July-September, dragged down by a contraction in manufacturing, weak investment, and lower consumption demand. This is the lowest quarterly growth rate in the five-and-half years of the NDA government. FICCI President Sandip Somany said the meeting delved into infrastructure bottlenecks in terms of the rules, regulations and how to streamline them to promote business. Assocham Secretary General Deepak Sood said a common suggestion was how to increase the demand in the economy and inject liquidity into the system.
FIEO President Ajay Sahai said the exporters’ body has highlighted the liquidity concerns of exporters and sought rollout of e-wallet recommended by the GST Council to ease liquidity of exporters. The meeting was also attended by Minister of State for Finance and Corporate Affairs Anurag Thakur, Finance Secretary Rajiv Kumar, Economic Affairs Secretary Atanu Chakraborty, Revenue Secretary Ajay Bhushan Pandey among others.
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